Free Trial

Futures Weaker With US Tsys, BoJ To Raise FY Inflation Forecast


In post-Tokyo trade, JGB futures are weaker, closing -7 compared to settlement levels, after US tsys finished the NY session 2-8bp cheaper across benchmarks ahead of tomorrow’s FOMC meeting.

  • A 25 bp hike is fully priced for Wednesday's meeting, but there is considerable uncertainty over the outlook. The risk that the Fed's stance is more hawkish than feared weighed on US tsys.
  • The latest US PMIs showed continued services price pressure along with softer expected business activity.
  • Supply also weighed on US tsys at the margin, even though the 2-year auction garnered decent demand. Sizeable flows weighed on tsys in the NY session, a block seller of 43k in TU was the highlight.
  • Bloomberg reported (See link) that the BoJ is considering a sharp rise in its inflation forecast for the current financial year, to around 2.5% (from the projected 1.8% made in April). Beyond this, into the 2024 and 2025 financial years, the forecasts aren't expected to change too much, which is similar to what Reuters noted yesterday.
  • The government already raised its inflation forecast for this financial year to 2.6% last Thursday.
  • Note the data calendar is empty today, with the June PPI out tomorrow.
  • Today the MoF plans to sell Y700mn of 40-year JGBs.

To read the full story



MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.